Enraged by retail FDI, CPM braces to turn heat on govt

NEW DELHI: The policy wrangling between the UPA and Left is getting real. Refusing to play ball with the Manmohan Singh government on issues like FDI in retail trade, privatisation of pension funds and raising FDI cap in the insurance sector, the CPM is toying with tougher ways to turn the heat on the UPA government.

Party general secretary Prakash Karat on Wednesday struck a hard note against FDI in retail saying, "We do not want a piecemeal opening up of FDI in retail trade. We would like to stop this." The party is examining 'various options', which will be discussed at the polit bureau meeting on February 17 and 18, to resist the government's move to open up FDI in retail.

Commerce minister Kamal Nath's announcing the intention to permit FDI in certain segments, just days after Congress president Sonia Gandhi wrote to prime minister Manmohan Singh to reconsider FDI in retail, has not gone down well with the Left. "The government is going ahead. We have taken a serious view of this," Mr Karat said. Ms Gandhi's letter reflected the concerns of the Left, which has been opposing the move. The government had gone ahead with opening up FDI in single-brand retail despite the Left's protests.

Mr Karat's toughening of his stand against FDI in retail will add to the troubles of the government, which is already under pressure from within on the proposal. Though Mr Karat did not disclose what proposals the polit bureau was to discuss to stop the move, which does not require parliamentary approval, indications are that the party was not going to take it lying down if the government did, in fact, go ahead.

Unlike in the case of FDI in retail, the government requires the Left's support for passage of the pension funds bill and raising FDI in insurance sector, both of which are facing the Left roadblock. Mr Karat made it clear that the Left was opposed to privatisation of pension funds, and demanded that the EPFO manage the funds during the interim arrangement.

The rising inflation graph has also added to the discontent within the Left with the UPA government. The CPM is blaming the situation on the government, saying that the UPA cannot claim it was due to rapid growth, which has also been witnessed by China where inflation is pegged below 2%.

The customary UPA-Left consultations on budgetary proposals have yet to take place this time though the Left has already sent its wish list. While the CPM has been battling it out on policy issues with the UPA at the centre, the party is under attack from its allies and other Leftists over Singur and Nandigram.

The polit bureau, which is meeting for the first time after Nandigram, will examine land acquisition issues in the light of the Singur experience. The proposals thrown up during the discussions are likely to formulate the party's policies for Nandigram and any other SEZ in the state.

The CPM is also sending a note to the standing committee on commerce seeking amendments to SEZ Act and rules. This would include the demands on ceiling on land acquired, increasing the land use for industrial purposes to 50% and reviewing tax concessions.

The recent disinvestment of government shares in NHPC, Power Grid and REC also irked the Left, which have opposed disinvestment of all profit-making PSUs. What angered the Left further was the claim that it was consulted, though the government later clarified that "consultation did not necessarily mean consensus".